The paper 'Differences between the Joint Venture and Strategic Alliance" is a perfect example of marketing coursework. The emergence of globalisation has had a huge impact on how companies operate (Chetty and Campbell, 2003). Rapid technological advancement, widespread changes as well as emerging markets have led to a significant level of acquisition and other collaborative activities with the aim of attaining sustainable competitive advantage. In order to enter into new markets, firms require entry strategies such as exporting, licensing, direct investments, and mergers and acquisitions (Cullen and Parboteeah, 2010). Companies participating in international business for a number of reasons such as to acquire growth and expansion, to serve a large market, to gain competitive advantage, to gain better-value factors of production, and to develop economies of scale among others (Chetty and Campbell, 2003). With globalization and liberalization, it is not difficult for companies to enter into new markets.
The expansion of companies into international markets can be found to be beneficial for foreign companies and to the domestic market (Chetty and Campbell, 2003). The idea of internalization by foreign companies sounds promising for both the company and the new market but it is not as easy as it sounds.
An important step in entering a foreign market is to select the mode of entry. More and more companies today choose to access new markets using strategic alliances and joint ventures. The two entry strategies are based on mutually-beneficial relationships that are able to boost a company’ s competitive advantage over the competitors (Chi and McGuire, 2006). However, there are some situations that favour one from the other. This paper will discuss the differences between an international joint venture company and a strategic alliance.
It will also highlight the strengths and weaknesses of each with regard to achieving strategic objectives. In addition, the essay will discuss the situations that would favour one strategy from the other. Differences between the Joint Venture and Strategic Alliance A strategic alliance is a relationship established between two or more companies with the aim of achieving specific strategic goals and objectives (Ben et al. , 2002). The twist however is that the strategic partners often uphold their current status as independent entities; there is no new business that is formed.
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